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Dealing With Unlicensed Payday Lenders

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Updated on July 14, 2010: At the bottom of this post is a newer version of a letter template which you may or may not want to use, make sure you use your own words, this is only a sample.

If everyone will just give a link to this thread to the new members who come here for guidance it may be more helpful and less work for the experienced members who are researching information. I wrote this awhile back and am most happy to share it. THANKS!

You are only obligated to pay back the principal amount you borrowed from an unlicensed/illegal Internet Payday Lender.

What should you do?

Close your account asap, if you are unable to close your account, go into your bank and ask to speak with the Branch Manager, tell him/her you need a hard debit block placed on your account immediately! Explain that you are revoking ACH authorizations from unlicensed/illegal companies, and have learned these companies are notorious for ignoring revocation, therefore it is important to BLOCK any withdrawal attempts on your account to protect your interest. This is your privilege, do not accept no for an answer. The following link will provide you important information regarding closing accounts. CLICK HERE
What next?
AFTER your account is secure send each pdl (the unlicensed and illegal) an email similar to THIS (please scroll down to locate letter template). Tailor this letter to your needs, and try to write it with the same basic concept in your own words. You will need to research and locate email addresses/physical addresses if you don't already have them, I suggest that you type the name of the pdl (example: "oneclickcash address") in the search box in the upper right hand corner of this forum. You may also search for addresses HERE at the Better Business Bureau.
File complaints: Most of the time, you can file a complaint online with the following, I encourage you to follow through with doing so, you will need to search the Internet for your state Attorney General's website, however, here are links to file complaints for the FTC, Online complaints: Federal Trade Commission., and the BETTER BUSINESS BUREAU.
Keep in mind that you may not receive a response for days, or even weeks, or, you may receive harassing and threatening phone calls. I have found the best way to deal with this is not to respond or reply, simply hang up.
Side note: If you have paid an illegal/unlicensed payday lender above and beyond the principal amount you borrowed, it might be a good idea to demand a refund and a paid in full letter/receipt. You may or may not get one or both. It still doesn't hurt to include that tidbit in your letter. :)

Name Of PDL

Your Name
City, State
Account #

This letter is to inform you that I am aware of the FACT that the loan you issued to me, is NOT legal or binding in my state. For your convenience, I have included my state payday loan laws below.

(Insert Your State payday loan laws here)

(Insert either (a) OR (b) which ever statements below which applies to you)

(a) The state of (insert your state) prohibits payday loans, therefore, I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.
(b) The state of (insert your state) requires Internet payday lenders to be licensed in MY state. I have already researched this information, your company does NOT have a license to lend in the state of ___________, if I am mistaken I will need proof in the form of a license number so that I may verify it with my Attorney General. I am bound by the state laws where I reside. As I have no presence in your state or country (only insert one choice, state or country, depending on your situation.), therefore I have no legal obligation to the 'governing laws' you may have detailed.

Be advised that as of today (insert todays date) I am revoking ANY and ALL ACH authorizations with your company from debiting any AND all of my personal accounts, per Federal law, Regulation E Section 205.10 Preauthorized transfers. I also revoke ANY and ALL wage assignments I may have signed, by you, including but not limited to; any of your affiliates, dba's, and collection agencies assigned to this account. None of the above no longer have my permission to access my accounts or impose a wage assignment.

I will only communicate to resolve this matter via email. If you ignore this notice and attempt to contact me or any of my references via telephone, you will be ignored and any payments owed will be delayed. I am willing to pay the principle amount of the loan only, however, no address means NO payments, this is not negotiable.

If you do NOT reply to this notice within 48 hours I will be forced to file complaints with my Attorney General (insert name of your attorney general), the BBB and the Federal Trade Commission. If you reply to this notice with any misleading legal implications or menacing course of actions you are unable to follow through with, I will be forced to take actions against you which could cause you to lose your license in the state of (insert the state they are licensed in) < (only use this statement if the illegal lender is licensed to lend in a state other than yours) and cause damage to your reputation, which could potentially decrease your clientele!


Your Name[/QUOTE]

They are a scam do not pay them any mind. Was this an onlin loan??

Sub: #61 posted on Wed, 06/17/2009 - 06:00

Cool_Abyss Cool_Abyss
(Posts: 2936 | Credits: )


Sub: #62 posted on Wed, 06/17/2009 - 06:01


That is what I figured and they are probably unlicensed anywayz. I am sure you overpaid the loan already so just ignore them.

Sub: #63 posted on Wed, 06/17/2009 - 06:04

Cool_Abyss Cool_Abyss
(Posts: 2936 | Credits: )

You should tell your job that they are trying to scam you as they may decide to try and make trouble at work.

Sub: #64 posted on Wed, 06/17/2009 - 20:23

Chrys Henderson Chrys Henderson

(Posts: 2538 | Credits: )

I just submitted a request M&T Bank to close my checking account. My PDLs have gotten out of control. I owe almost $5K. Here's my list of PDL's. I cannot believe I have allowed this to happen. What a mess. Any advice on how to handle these companies? I am in Maryland, btw.

Total Due Finance Amt
MyPayDayLoan $450.00 $150.00
CashNetUsa $1,400.00 $360.36
United Cash Loans $400.00 $120.00
Everest Cash $300.00 $90.00
MyCashNow $470.00 $140.65
Discount Advances $500.00 $150.00
PayDayMax $400.00 $120.00
AmeriLoan $400.00 $120.00
Integrity $500.00 $150.00

Sub: #65 posted on Thu, 06/18/2009 - 08:25


payday loans are illegal in my state (Maryland), but my lenders are saying that the contracts are still viable because it was done over the internet, and that they are not located in Maryland, but in a state where they are licensed? i was under the impression that if payday loans are illegal in my state that the contracts are void. now i'm worried it will hurt my credit and they will send me to collections and my wages will be garnished! I'M PANICKING!

Sub: #66 posted on Thu, 06/18/2009 - 11:06


Transactions in your home state are governed by that state's laws, regardless of the lies that these PDLs love to say.

Sub: #67 posted on Thu, 06/18/2009 - 23:55

Chrys Henderson Chrys Henderson

(Posts: 2538 | Credits: )

I am new to all this and now wondering what you mean by illegal? I am in Texas and have loans out with:
500Fast Cash
VIP Cash
Lending Store
Ace Cash Express online
Loan Shop
Crown Financial
Star Cash Processing
Cash Advance Network
Payment Direct Inc
Solomon Finance
NationalPayday (Costa Rica)

Are these ok or are they illegal?

Sub: #68 posted on Sun, 06/21/2009 - 11:16

texasdebbie830 texasdebbie830

(Posts: 5 | Credits: )

i live in philadelphia, pa
i took out a loan with pdl loans but they do not have a website so i could not arrange with them to pay off my debt in full. i eventually had my bank account closed and now they are contacting me so thai i can "bring my account current". are they illegal in philadelphia pa & do i still owe them the full amount of the principle?

Sub: #69 posted on Tue, 06/23/2009 - 09:12


So, since I live in IN and PDLs are legal but have to follow certain laws, the online PDL has to follow those laws? I am aware that in IN you can only have one PDL, it can't be rolled over and they can only charge $15/@$100 twice as interest. So,, if I have more than one online PDL, does that make the PDLs and the companies illegal in IN? I cannot find laws pertaining to online PDLs in IN.

Sub: #70 posted on Tue, 06/23/2009 - 18:04


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